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JBS set to become world's largest chicken meat producer?

11 June 2013

JBS looks likely to become the world’s biggest chicken meat producer, following a weekend announcement that it will buy a Brazilian poultry and pork processing business from competitor, Marfrig, for about $2.5billion.

The deal will include Seara’s 30 processing units in Brazil which can process 2.7million chickens and 17,000 pigs daily, as well as producing a large volume of further processed meats every month. The acquisition also includes Marfrig’s Zenda tannery business in Uruguay.

JBS is already the world’s largest hides tanner and beef producer, with operations in South and North America, Australia and Europe.

The sale of Marfrig’s Seara Brasil business is still subject to approval by Brazilian regulatory authorities.

Assuming the deal gets regulatory approval, however, JBS would overtake US giant, Tyson Foods Inc as the world’s largest poultry producer.

“We are going to operate the largest chicken platform globally,” JBS SA president and chief executive Wesley Batista told a conference call held yesterday.

“This is a strong strategic position for JBS. We believe we can add a lot of value with the addition of Seara,” he said.

“This unique opportunity fits with our strategy to grow our chicken and pork business and to further grow our processed products business,” Batista said. “JBS has a history of integration and we believe we have been integrating our business well over the years.”

Analysts say the deal will allow Marfrig to reduce its debt load, having seen its debt rating downgraded earlier this month.

JBS bought Pilgrim’s Pride, one of the largest chicken meat processors in the US, in 2009.

JBS plans to call an extraordinary shareholders' meeting soon so that shareholders can “take cognizance of and ratify the transaction that is the subject of the Agreement,” a company statement said.

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